The Ohio appropriations legislation for fiscal year 2026-27 (H.B. 96) makes several changes to the state's unemployment insurance (SUI) law.

New SUI surcharge

Effective January 1, 2026, a Technology and Customer Service Fee (surcharge) applies to contributory and reimbursing nonprofit employers.

For contributory employers, this surcharge is 0.15% of SUI covered wages per employee — the maximum rate allowed under the law. Because this surcharge is not used for the payment of unemployment benefits, it is excluded from state contributions when completing the federal Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return.

For a reimbursing nonprofit organization or nonprofit organization group, the fee may not exceed $13.50 per organization or group. The state must collect the fee whenever the organization or group of organizations files or renews a surety bond required under continuing law. A filed surety bond must be in force for no less than two calendar years.

Reduction in employer time to respond to state request for separation information

The law reduces the time an employer has to provide information requested by the state for use in determining an individual's right to unemployment benefits. The new limitation is ten working days after the request is sent instead of ten calendar days.

The penalty for failure to timely respond to state requests for information can be substantial. Under current law, failure to comply with a requirement of the state's unemployment compensation law can result in a fine of not more than $500 for a first offense and a fine of $25 to $1,000 for each subsequent offense.

Interest on late employer SUI tax payments

Beginning January 1, 2026, a late SUI payment bears interest at the rounded federal short-term rate, not to exceed 15%.

Under prior law, a late SUI payment bore interest at the annual rate of 14% compounded monthly.

Ernst & Young LLP insights

Ohio employers may wish to assess the cost impact of the state's new SUI surcharge and confirm that payroll systems properly calculate the surcharge while excluding it from state contributions reported on federal Form 940.

Given the reduced timeframe for responding to state requests for separation information, employers may want to evaluate and, if necessary, update internal processes for handling unemployment claims correspondence. Because the response period is now measured in calendar days rather than working days, timely coordination among human resources, payroll and third-party administrators may help reduce exposure to penalties.

In addition, employers should review Ohio SUI payment procedures to help ensure timely remittance.